Bombardier Announces Financial Results for the First Quarter Ended March 31, 2013

May 9, 2013Montréal
Bombardier Inc.,
Press Release

(All amounts in this press release are in U.S. dollars unless otherwise indicated. This press release contains both IFRS and non-GAAP measures. Non-GAAP measures are defined and reconciled to the most comparable IFRS measures in the Corporation’s MD&A. See Caution regarding Non-GAAP measures at the end of this press release. Comparative figures have been restated. See Accounting and reporting developments in the Corporation’s MD&A.)

Revenues of $4.3 billion, compared to $3.5 billion last fiscal year

EBIT before special items(1) of $240 million, or 5.5% of revenues, compared to $188 million, or 5.4%, last fiscal year

EBIT of $240 million, or 5.5% of revenues, compared to $211 million, or 6.1%, last fiscal year

Adjusted net income(1) of $156 million, compared to $150 million last fiscal year

Adjusted earnings per share(1) of $0.08, same as last fiscal year

Free cash flow usage(1) of $590 million, compared to a usage of $695 million last fiscal year

Available short-term capital resources of $5.1 billion including cash and cash equivalents of $3.7 billion as at March 31, 2013, compared to $4.0 billion and $2.6 billion respectively, as at December 31, 2012

Backlog of $63.0 billion as at March 31, 2013, compared to $64.9 billion as at December 31, 2012

Issuance of $2 billion of unsecured Senior Notes

(1) See Caution regarding Non-GAAP measures at the end of this press release.

Bombardier today reported its financial results for the first quarter ended March 31, 2013. Revenues totalled $4.3 billion for the first quarter ended March 31, 2013, compared to $3.5 billion for the same period last fiscal year.

For the first quarter ended March 31, 2013, earnings before financing expense, financing income and income taxes (EBIT) before special items totalled $240 million, or 5.5% of revenues, compared to $188 million, or 5.4%, for the same period last year.

On an adjusted basis, net income amounted to $156 million, or earnings per share (EPS) of $0.08, for the first quarter ended March 31, 2013, compared to $150 million, or EPS of $0.08, for the same period the previous year.

For the three-month period ended March 31, 2013, free cash flow usage (cash flows from operating activities less net additions to property, plant and equipment and intangible assets) totalled $590 million, compared to a usage of $695 million for the same period the previous year. Available short-term capital resources of $5.1 billion include cash and cash equivalents of $3.7 billion as at March 31, 2013, compared to $4.0 billion and $2.6 billion respectively as at December 31, 2012. The overall backlog reached $63.0 billion as at March 31, 2013, compared to $64.9 billion as at December 31, 2012.

“We had a good first quarter, with an overall increase in revenues of 25%,” said Pierre Beaudoin, President and Chief Executive Officer, Bombardier Inc. “Aerospace is showing increased deliveries, revenues and EBIT, and the CSeries tests are progressing well with first flight next month.”

“Transportation also saw an increase in revenues and EBIT, and received a good level of new orders across all divisions and key markets, totalling $2 billion. We expect an increase in revenues over the course of the year, while making good progress towards the group’s EBIT target of 8% by 2014. With our strong overall backlog of $63 billion and state-of-the-art products coming into service in the next few years, we’re very well positioned for solid future growth,” concluded Mr. Beaudoin.

Bombardier Aerospace

Bombardier Aerospace’s revenues amounted to $2.3 billion for the three-month period ended March 31, 2013, compared to $1.5 billion for the same period last fiscal year. EBIT before special items totalled $101 million or 4.5% of revenues for the first quarter ended March 31, 2013, compared to $66 million, or 4.4%, last fiscal year.

Free cash flow usage totalled $461 million (including net additions to property, plant and equipment (PP&E) and intangible assets of $503 million) for the first quarter ended March 31, 2013, compared to a usage of $572 million (including net additions to PP&E and intangible assets of $372 million) for the same period last fiscal year.

A total of 53 aircraft were delivered during the first quarter ended March 31, 2013, compared to 37 for the same period last fiscal year, including 39 business aircraft, compared to 29 for the same quarter last fiscal year.

Bombardier Aerospace signed a purchase agreement with Russia’s Ilyushin Finance Co. (IFC) to acquire 32 CS300 aircraft, with options for an additional 10. This agreement is subject to approval by the company’s shareholders and follows a letter of intent signed in 2011. Based on the list price, the conditional order for 32 aircraft is valued at $2.6 billion. Additionally, Danish lessor Nordic Aviation Capital purchased four Q400 NextGen aircraft, bringing its Q400 aircraft fleet to 43.

Subsequent to quarter-end, in April 2013 Porter Airlines was identified as the previously unidentified Americas-based CSeries aircraft customer when it announced the conversion of its letter of intent to a conditional agreement for up to 30 CS100 aircraft. This $2.08 billion-commitment, based on list price, makes Porter Airlines the Canadian CSeries aircraft launch customer. As at March 31, 2013, commitments for the CSeries totalled 388, including 145 firm orders from nine customers in eight countries.

Bombardier Aerospace’s backlog totalled $32 billion as at March 31, 2013, compared to $32.9 billion as at December 31, 2012.

Bombardier Transportation

Bombardier Transportation’s revenues amounted to $2.1 billion for the three-month period ended March 31, 2013, compared to $2.0 billion for the same period last year. EBIT totalled $139 million, or 6.7% of revenues, compared to $122 million, or 6.2%, for the same quarter the previous year. Free cash flow usage totalled $73 million for the quarter ended March 31, 2013, compared to a usage of $85 million for the same period last fiscal year.

New orders reached $2.0 billion (book-to-bill ratio of 0.9), compared to $1.2 billion for the same quarter last fiscal year. The order backlog totalled $31.0 billion as at March 31, 2013, compared to $32.0 billion as at December 31, 2012 (comparative numbers have been restated to exclude Bombardier Transportation’s proportionate share of joint ventures’ backlog). The $1 billion or 3% decrease in order backlog is mainly due to the weakening of some foreign currencies versus the U.S. dollar as at March 31, 2013 compared to December 31, 2012, mainly the euro and pound sterling.

The group’s new orders included a variation order for 170 additional cars under a framework agreement with Siemens AG to develop and supply important components for the next ICx high speed trains for Deutsche Bahn, valued at $440 million.

In January and April 2013, Bombardier Transportation’s partner, CSR Nanjing Puzhen Rolling Stock Co. Ltd from China, won orders for 18 low-floor trams and 15 catenary-free low-floor trams, which will be built based on the group’s FLEXITY 2 technology. The vehicles will be equipped with the innovative FLEXX urban 3000 bogies and MITRAC 500 propulsion and control system. Bombardier Transportation will support the projects under a technology license agreement signed in 2012. The latter is the first order worldwide for a catenary-free tram equipped with the new light and long-life Bombardier PRIMOVE battery.

After quarter-end, Bombardier Transportation signed agreements with Russian rail manufacturer Uralvagonzavod (UVZ) establishing a partnership for joint development of metros for the market in Russia and the CIS.

Class A and Class B SharesA quarterly dividend of $0.025 Cdn per share on Class A Shares (Multiple Voting) and of $0.025 Cdn per share on Class B Shares (Subordinate Voting) is payable on June 30, 2013 to the shareholders of record at the close of business on June 14, 2013.

Holders of Class B Shares (Subordinate Voting) of record at the close of business on June 14, 2013 also have a right to a priority quarterly dividend of $0.000390625 Cdn per share.

DIVIDENDS ON PREFERRED SHARES

Series 2 Preferred SharesA monthly dividend of $0.0625 Cdn per share on Series 2 Preferred Shares has been paid on March 15 and April 15, 2013.

Series 3 Preferred SharesA quarterly dividend of $0.195875 Cdn per share on Series 3 Preferred Shares is payable on July 31, 2013 to the shareholders of record at the close of business on July 12, 2013.

Series 4 Preferred SharesA quarterly dividend of $0.390625 Cdn per share on Series 4 Preferred Shares is payable on July 31, 2013 to the shareholders of record at the close of business on July 12, 2013.

About BombardierBombardier is the world’s only manufacturer of both planes and trains. Looking far ahead while delivering today, Bombardier is evolving mobility worldwide by answering the call for more efficient, sustainable and enjoyable transportation everywhere. Our vehicles, services and, most of all, our employees are what make us a global leader in transportation.

Bombardier is headquartered in Montréal, Canada. Our shares are traded on the Toronto Stock Exchange (BBD) and we are listed on the Dow Jones Sustainability World and North America indexes. In the fiscal year ended December 31, 2012, we posted revenues of $16.8 billion. News and information are available at bombardier.com or follow us on Twitter: @Bombardier.

CS100, CS300, CSeries, FLEXITY, FLEXX, MITRAC, NextGen, PRIMOVE, Q400, and The Evolution of Mobility are trademarks of Bombardier Inc. or its subsidiaries.

The Management’s Discussion and Analysis and the interim consolidated financial statements are available at ir.bombardier.com.

FORWARD-LOOKING STATEMENTS

This press release includes forward-looking statements, which may involve, but are not limited to: statements with respect to our objectives, guidance, targets, goals, priorities, our market and strategies, financial position, beliefs, prospects, plans, expectations, anticipations, estimates and intentions; general economic and business outlook, prospects and trends of an industry; expected growth in demand for products and services; product development, including projected design, characteristics, capacity or performance; expected or scheduled entry-into-service of products and services, orders, deliveries, testing, lead times, certifications and project execution in general; our competitive position; and the expected impact of the legislative and regulatory environment and legal proceedings on our business and operations. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “anticipate”, “plan”, “foresee”, “believe”, “continue”, “maintain” or “align”, the negative of these terms, variations of them or similar terminology. By their nature, forward-looking statements require us to make assumptions and are subject to important known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. While we consider our assumptions to be reasonable and appropriate based on information currently available, there is a risk that they may not be accurate. For additional information with respect to the assumptions underlying the forward-looking statements made in this press release refer to the respective Guidance and forward-looking statements sections in Overview, Bombardier Aerospace and Bombardier Transportation sections in the Management’s Discussion and Analysis (“MD&A”) in the Corporation’s annual report for the fiscal year ended December 31, 2012.

Certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include risks associated with general economic conditions, risks associated with our business environment (such as risks associated with the financial condition of the airline industry and major rail operators), operational risks (such as risks related to developing new products and services; doing business with partners; product performance warranty and casualty claim losses; regulatory and legal proceedings; the environment; dependence on certain customers and suppliers; human resources; fixed-price commitments and production and project execution), financing risks (such as risks related to liquidity and access to capital markets, exposure to credit risk, certain restrictive debt covenants, financing support provided for the benefit of certain customers and reliance on government support) and market risks (such as risks related to foreign currency fluctuations, changing interest rates, decreases in residual values and increases in commodity prices). For more details, see the Risks and uncertainties section in Other in the MD&A of the Corporation’s annual report for the fiscal year ended December 31, 2012. Readers are cautioned that the foregoing list of factors that may affect future growth, results and performance is not exhaustive and undue reliance should not be placed on forward-looking statements. The forward-looking statements set forth herein reflect our expectations as at the date of this press release and are subject to change after such date. Unless otherwise required by applicable securities laws, we expressly disclaim any intention, and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

CAUTION REGARDING NON-GAAP MEASURES

This press release is based on reported earnings in accordance with International Financial Reporting Standards (IFRS). Reference to generally accepted accounting principles (GAAP) means IFRS, unless indicated otherwise. This press release is also based on non-GAAP financial measures including EBITDA, EBIT before special items, EBIT margin before special items, adjusted net income, adjusted earnings per share and free cash flow. These non-GAAP measures are mainly derived from the interim consolidated financial statements, but do not have a standardized meaning prescribed by IFRS; therefore, others using these terms may calculate them differently. Management believes that providing certain non-GAAP performance measures, in addition to IFRS measures, provides users of our interim consolidated financial statements with enhanced understanding of our results and related trends and increases transparency and clarity into the core results of our business. Refer to the Non-GAAP financial measures and Liquidity and capital resources sections in the Corporation’s MD&A for definitions of these metrics and reconciliations to the most comparable IFRS measures.